The cannabis sector has been in a bit of turmoil for around a year now and many companies in the sector have felt the pressure. One such company is Organigram Holdings (TSX:OGI) (NASDAQ:OGI) and on Tuesday, its investors got a bit of a jolt after its shares crashed significantly.
The stock declined by as much as 9.2% on Tuesday after the company’s financial results for the third fiscal quarter proved to be a disappointment. In such a situation, it could be worthwhile for investors to take a closer look at the situation with OrganiGram.
The company reported revenues of C$18 million for the quarter but that was significantly lower than the C$24.8 million that it had generated in the prior-year quarter. In the previous quarter, OrganiGram had managed to generate C$23.8 million in revenues.
However, that is not all. OrganiGram also posted a massive net loss of as much as C$90 million, which worked out to loss per share of C$0.51. That amounted to a loss that was nine times higher than what the company reported in the prior-year period. In the previous quarter, OrganiGram reported losses of C$6.8 million.
The figures proved to be well short of analysts’ expectations as well. Analysts had estimated revenues to be C$22.4 million and a net loss per share of just C$0.4. The company stated that the poor performance was primarily due to the recent job cuts. It delayed the launch of new products, including that of its affordable offering.
That apparently resulted in OrganiGram failing to gain a significant market share in the dried flower space. It should be noted that dried flower is the biggest segment in the recreational market at this point in time. The company remains upbeat about the launch of new products and the expansion of the current product lines. That being said, the latest performance is expected to remain a cause for worry for investors. Sign up
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